Van Dyck Law, LLC is a full service Estate Planning & Elder Law practice. They write about comprehensive planning in the areas of wills, trusts, powers of attorney, medical directives, Elder Law and probate & estate administration.

February 2015

02/27/2015

Medicaid is the United States' health care safety net. It is an insurance program for low-income and needy people that provides health-related coverage for children, many seniors, and/or people who are disabled. A widespread and dangerous misconception is Medicare will cover long-term costs. In reality, Medicare benefits for long-term care are very limited. Medicare pays only for skilled care that is deemed "medically necessary," and it does not cover personal care required by most seniors with chronic, custodial care needs.

A recent article in The Victoria (TX) Advocate, titled “How does Medicaid factor into financial planning?”, recommends that seniors need a strategy for paying for long-term care, should the need arise. In some instances, however, some individuals may have to rely on Medicaid if they don't have enough income to purchase long-term care insurance, the assets to pay for care themselves, or they are uninsurable.

Medicaid planning was often thought of as a viable tool for long-term planning. However, estate planning attorneys are now rethinking this strategy. Medicaid planning—which was, in essence, planning to make asset transfers, used to be the primary tool used by seniors considering long-term care costs. However, law changes and the advent of new financial products and plans will work better, they say. Medicaid "planning" is actually a misnomer as most seniors don’t plan to go on Medicaid, but rather experience an urgent care need, and there aren’t any other options. A better alternative is to obtain a long-term care insurance policy.

To qualify for Medicaid, a senior must be at what the government deems poverty level: less than $2,000 in countable assets (countable assets doesn’t include one's personal residence and this threshold varies by state) and roughly $2,000 or less in monthly income. Even if a senior is considered well off when he or she retires, medical and long-term care costs can decrease their assets to the poverty level, which means Medicaid would be an option at that point.

Some seniors will purposely transfer or retitle assets to qualify for Medicaid. This can be risky, the original article advises. There are other methods of spending down assets which can be more beneficial to the senior—like using cash assets to make substantial home improvements and repairs, adding safety features in the home should the senior become wheelchair bound.

Another risk in depending on Medicaid for long-term care is that federal law requires states to look for recovery of Medicaid benefits. The state will put in a claim against any assets that pass through probate upon the death of the recipient. This will include assets not counted during eligibility, such as the senior’s home.

Because estate and lifetime planning can be overwhelming and wrought with pitfalls, the article advises seniors to enlist the help of an estate planning attorney and, more particularly, an elder law attorney to evaluate all options available.

02/26/2015

Two recent studies on elder financial abuse were recently published— one suggesting the problem is far bigger than we think and the other suggesting it’s much smaller. In addition, there are a few government and private initiatives starting to seriously attack the scourge of financial exploitation of older Americans—considered the most prevalent form of elder abuse.

It’s a problem that Kathleen Quinn, Executive Director of the National Adult Protective Services Association, called “rampant, largely invisible, expensive and lethal” at a recent Senate Special Committee on Aging hearing on the subject. In fact, as reported in a recent Forbes article titled “Why Elder Financial Abuse Is Such A Slippery Crime,” a new study asserts that financial elder abuse costs $36.5 billion annually—more than 12 times the figures that MetLife has published in the past few years. Conflicts of interest aside, it’s well accepted that much of the financial abuse with seniors often goes unreported. This can be due to shame and embarrassment of the victims. According to a New York State Elder Abuse Prevalence Study, only one in 44 cases is reported.

Each type of fraud has a different age spectrum. Investment scams peak around age 65, and work-from-home scams, dating scams, weight loss, and most Internet scams are more common at a bit younger age. Finally, theft by family members peaks much later.

While attempting to determine the extent of financial elder abuse is difficult, curbing it is even tougher. Elder abuse frequently will involve overlapping types of crimes, such as neglect and physical and sexual assault. Further, many caregivers, family members, financial services employees, and police officers simply are not trained in preventing, detecting or dealing with financial exploitation of the elderly. Add to this a lack of coordination between agencies and professionals, and you can see the scope of the issue.

Fortunately, our government is getting more involved. The 2015 White House Conference on Aging has made “elder justice” one of its four tracks. Also, a government working group known as the Elder Justice Coordinating Council, the Department of Justice, HHS’s Administration for Community Living and the Consumer Financial Protection Bureau’s Office for Older Americans have teamed up to gather data and create materials for professionals and family members. The Securities and Exchange Commission is also getting more involved. Its first Investor Advocate says one of his agency’s priorities is to give financial service professionals more effective tools to protect clients whenever an adviser or registered representative suspects financial or other abuse of a vulnerable client.

02/25/2015

No matter how old you are, you're still your parents' child. Someday, however, they may need to rely on you for help when it comes to their finances. With an aging population, loved ones must grapple with how to help their elderly parents manage their finances. Regardless of whether you and your parents have always talked freely about money or never discussed the subject, there are several considerations you may want to address with them as they approach their later years.

A recent article in The (Manchester, NH) Union-Leader, titled “Helping parents navigate their finances as they get older,” recommends a proactive approach as the best way to broach this delicate subject. Starting the conversation can be difficult for some, but waiting can cause even more headaches. For example, there are an increasing number of scams targeting our seniors. You want to be ahead of the curve to protect their nest egg and your time.

Take an inventory of their finances to get a baseline understanding of their financial situation, including a list of brokerage and bank accounts, insurance policies, and titles to their home and autos. See whether they are paying their bills on time to help you determine the extent of your day-to-day involvement in the management of their affairs. Obtain copies or know where they keep important documents like their Social Security cards and birth certificates. Your parents should give you the contact information for their CPA, financial advisors, and estate planning attorney.

The original article suggests that you simplify wherever possible, like using online bill paying. If your parents are not comfortable with a computer, ask a trusted family member to assist. The goal is to streamline and to provide some monitoring of their accounts for suspicious activity.

Check into your parents’ estate planning. This should include, at a minimum, a will, financial durable powers of attorney, health care durable powers of attorney, and a living will. If they don't have these documents in place, the probate court will make the important decisions, which can be costly and time-consuming. An estate planning attorney can help draft the appropriate documents and review their existing documents. In addition, the beneficiaries designated on your parents’ life insurance policies, IRAs, qualified accounts, and pensions should be coordinated with their estate planning documents and overall intentions.

This article is a nice starting point to help your parents. There are many family dynamics at play with these conversations, so beginning earlier will help everyone; delaying these conversations can cause more anxiety and headaches. Talk with an experienced estate planning attorney and make sure you’re totally prepared.

02/24/2015

Gaining control over our finances is usually at or near the top of all New Year’s resolutions. What many people don’t realize, though, is that good legal planning is an essential component of our financial health. Effective legal documents can protect us from costly divorces, lawsuits and exorbitant transfer taxes. Why then, do half of us not even have a will?

Fox News recently posted some tips in an article titled “Is it time for your legal checkup?”The article advises that a will is a great starting point, even if you’re young and healthy. Once we have children, another important part of estate planning is designating a guardian who will rear your children if something unforeseen happens. It’s also important to decide the ages at which your kids should inherit assets. You should discuss all of this with your estate planning attorney: allowing the trustee to have the discretion as to how, whether, and when to make distributions can protect immature or young beneficiaries. This will also keep these assets from counting against a young person’s college financial aid applications.

The Fox News article also counsels against online or DIY estate planning kits, as no two situations are identical. You can trust an attorney with information about your loved ones’ spending issues, troubled marriages, developmental disabilities, gambling and/or substance abuse problems so that he or she can work with you to create a strategy to protect everyone. A “fill in the blanks” document could not possibly protect our goofy relatives from each other! Come on, your brother-in-law Ed is no financial planner!

A Power of Attorney allows you to name an agent who can sign documents and transact business on your behalf, if you become mentally or physically incapacitated. It’s critical to customize the document based upon your relationship with the named agent. For example, young people may want to limit the agent’s authority to just paying bills, and older married people usually want to delegate full power to each other.

While you are at it, think about your health care advance directive. This allows you to designate an agent who has your permission to speak with your medical caregivers about your treatment decisions on your behalf if you are unable to speak for yourself.

Once the basic estate plan is in place, you should revisit it periodically with your attorney. If there’s a big change in your circumstances—either good or bad—your estate planning attorney should be made aware.

02/23/2015

The comedian Robin Williams hadn't been deceased for long when a fight erupted over some of his belongings. Williams' third wife and his three children from a previous marriage landed in court with a dispute over personal items, including Williams' watches. When assets are being passed on to children from a prior marriage, trouble can quickly ensue. Having a clear will and a sound trust can help ease tensions. But experts are advising people who remarry to have even stronger asset defenses—prenups and even postnups that are highly detailed and clearly laid out. The message from the experts is simple: You can never have too many documents backing up your intentions.

"The mess comes when you don't have proper estate planning," according to an attorney interviewed in a recent article titled “Remarrying? Shower kids with love, and a good prenup” from CNBC. An important tool in that toolbox, he says, is a prenup. A prenup details how assets would be split up if the marriage fails or a spouse dies. A spouse who wants to protect assets in a second marriage should also talk to an experienced estate planning attorney about trusts.

One of the best features of a prenup is that it can protect nearly every kind of asset an individual may want to pass along—this includes art collections, cash, and the family business. Without a prenup, it’s easier for a spouse to obtain some unintended part of the estate if you die. A prenup should be airtight to avoid legal issues. Although Robin Williams had a well-thought-out estate plan when he passed, which included a prenup and a trust for his children, some of his personal items were left out of the documents. This is causing a fight between his spouse and his children.

Documenting every asset is necessary. Lists of paintings owned before a second marriage can be kept in multiple places, which helps you show evidence of your intentions … and the more detail, the better! Once a prenup is signed, it’s nearly unbreakable and is typically accepted by the courts.

The original articlegives us some guidelines to keep in mind and to discuss with your attorney:

Both you and your spouse should understand the prenup, and both should be represented by attorneys.

Negotiate and sign the prenup prior to your wedding. A common mistake is signing the prenup the day of the wedding!

After you're married, be careful not to commingle all assets because the source of funds—like joint or separate accounts—used to buy an asset will decided who owns it.

The more communication, the less misunderstanding. Conduct a family meeting and discuss your intentions for your estate.

Read about more tips in the article and talk to your estate planning attorney sooner to help avoid costly court battles later.

02/20/2015

The late, legendary DJ Casey Kasem's daughter Kerri Kasem and family members staged a press conference at Stanley Mosk Courthouse in Los Angeles Friday to urge the Los Angeles Police Department to arrest Mr. Kasem's widow Jean Kasem. Jean Kasem removed Mr. Kasem, along with his surgically implanted feeding tube, from a Santa Monica hospital on May 7 and took him to the Seattle area, where he died June 15, 2014. Then she took his body to Montreal and Oslo, where it sat in a freezer for months until he was buried in an unmarked grave shortly before Christmas. "If this isn't a case of elder abuse, I don't know what is," said Kerri Kasem attorney Martha Patterson. "It's equivalent to taking a baby out of an incubator."

“They ran out of food, bought a six-pack of Ensure at a drugstore, poured it into the feeding machine, and jammed it -- and they're saying this woman didn't kill him? The nurse in the car took pictures of his colostomy bag full of blood. The cops have all the evidence. Belle Chen at the DA office told me she'd love to have a crack at this case. LAPD should be ashamed.”

Jean Kasem has claimed Casey's death was Kerri Kasem’s fault. She removed him from life support because his 2007 health directive said to do so if life support "would result in a mere biological existence, devoid of cognitive function, with no reasonable hope for normal functioning"

"They all have blood on their hands," said Jean Kasem.

Kerri Kasem says that’s not true and she has started a foundation, Kasem Cares. She also supports Assemblyman Mike Gatto's legislation (AB 2034) that would allow a judge to rule on visitation [when a spouse forbids family members to see a loved one], instead of forcing family members to go through the very costly conservatorship process. In addition, it takes time, and your loved one could be dead.

Between Kerri Kasem and Jean Kasem, they have reportedly hired 13 sets of lawyers and spent more than $650,000 in legal fees—which is just one more point of contention. They are now fighting over who should pay court costs.

02/19/2015

There doesn’t appear to be much doubt that Robin Williams conveyed his estate plans to his family in the years before his tragic suicide last summer. His full estate was left to a trust, which his three adult children will inherit. There was a prenuptial agreement between Williams and his wife, Susan Schneider Williams, whom he married in 2011. And as part of his trust, another trust was established to support his wife in the event of his death. Williams also appears to have done his best to divvy up his personal possessions without resorting to listing each and every one. All clothing, jewelry, and photos he owned prior to his 2011 marriage to Schneider Williams? They go to the children. His awards and other career “memorabilia”? The kids get them. His possessions at a home he owned in Napa? The three children again. The Marin County home Robin Williams shared with his wife? Schneider Williams. The possessions in that residence? Well, excluding all of the above, those are hers. So where does that leave the tuxedo Williams wore at the couple’s wedding? Or his many collections of things like graphic novels, walking sticks, Japanese anime, and movie posters?

Well, in this case – court. In just four months after the comedian’s death, litigation has begun between Williams’ three children and his third wife. The recent slate.com article, titled “Robin Williams’ Family Is Like Yours” says that a good talk with the family is the best way to avoid post-death struggles over your estate after you pass away. Sit down with your loved ones and tell them about your will, and how you’d like to see your belongings divided up. Convey some life values while you’re at it. You can even ask for their input.

After the death of a well-loved parent, family squabbles can erupt over vacation homes that have been in the family for generations—or things with much less value. These battles are often over items that aren’t financially worth an hour of the most inexpensive lawyer’s time!

As for Robin Williams’ possessions, the lawyers for Schneider Williams referred to the items as “knickknacks,” while, in their counter-filing, Williams’ children claim these possessions were “carefully amassed.” They say that their stepmother of less than three years had the possessions quickly appraised, and was motivated by greed.

The original article explains that even worthless possessions can become proxies for personal battles that are, sadly, never resolved. Second and third marriages—like those of Robin Williams—make things more complicated, but any family can have such headaches, too.

Speak with an experienced estate planning attorney and get your plan in order. Then talk to your heirs so they know what to expect and are ready to deal with it.

02/18/2015

An important issue in dealing with wealth transfer for blended families is how the assets flow to the surviving spouse and family members or after the death of the surviving spouse. Ensuring the surviving spouse and his/her children are financially secure while providing an inheritance to your biological children can be accomplished through methods such as qualified terminable interest property trusts or irrevocable life insurance trusts. Both allow the assets of the deceased to flow in certain directions and potentially at certain intervals to ensure all parties receive a share of the wealth appropriately.

In an article titled “Tips for Successful Wealth Transfer to Your Survivors,”The (Lakeland FL) Ledger explains that blended families without a proper estate plan for wealth transfer could see problems that don’t happen with traditional families. For example, state inheritance rules, intestate laws, and conflicts in beneficiary designations could be inconsistent with the will. In addition, a disinheritance of new family members without the knowledge of the entire family can cause emotional friction between the surviving family members.

There have been some laws enacted that have changed how beneficiary designations are handled, so make sure your estate plan is in sync with your retirement accounts. Do this because those beneficiary designations generally supersede what is directed in your will.

Also, the original article says having a trust as a beneficiary of an account is a good way to control wealth transfer. It allows the assets to flow through a trustee rather than an account custodian. The discretionary distribution of assets is a method of controlling "from the grave" how your money is to be given to certain family members who might have issues dealing with their finances. It’s what’s known as a "spendthrift provision."

You can accomplish secure wealth transfer and estate planning by working with an experienced estate planning attorney. Protect your wealth and the relationship with your heirs by carefully creating an estate plan and discussing that plan with your family.

02/17/2015

Massachusetts regulators appear to be falling short in ensuring that nursing homes follow rules designed to improve care for some of their most vulnerable patients, those with dementia, a Globe review shows. Nursing homes have been notably slow to implement the improvements: Some have not completed the required staff training for dementia care that is required of all nursing homes and was supposed to be finished nearly three months ago, the Globe found in a random check of about one dozen facilities. Meanwhile, at least 40 nursing homes have asked for waivers to complete other upgrades required for facilities that specifically advertise special care for dementia patients, according to state data. And six have been cited for their failures, the state said.

The Boston Globe article, titled “Dementia care lacks oversight in Mass., data show,” says that despite the delays, state regulators are not conducting spot checks for compliance—they’re already just too busy with routine monitoring of more than 400 nursing homes. However, the state health department recently announced that its inspectors would now review dementia care during their annual visits to each facility. But this means some nursing homes may not be subject to these compliance checks for months.

This process has been slow, as the state handed out its dementia special care checklist for inspectors in December—almost six months after the rules were adopted.

The president of the state’s Advocates for Nursing Home Reform says the new rules, once implemented, could substantially improve the lives of nursing home residents. However, increased oversight and greater nursing home participation are crucial to ensure that the law’s benefits are meaningful. Nevertheless, nursing home administrators say they are struggling to comply with the rules due to its expense.

The Massachusetts Senior Care Association reports that many members have spent as much as $30,000 on the required staff training. Those rules—in addition to other general training requirements—are intended to close a loophole that allowed nursing homes to advertise dementia units without providing added training for their workers, specialized resident activities, or safety measures to prevent residents from wandering. Massachusetts is lagging behind the rest of the country on requiring these protections. The original article reports that a 2005 federal report noted that 44 states at that time already had requirements governing training, staffing, and security for facilities that provide specialized dementia care. Regulators believe it was important to mandate the training, as over 50% of the state’s 41,000 nursing home residents have dementia.

02/16/2015

Leslie Sieleni found out her son had Down syndrome when he was 5 days old. Now 14, Sean Sieleni talks about driving a car, going to college, living on his own and getting a job. His mom supports those dreams, but she worries. One thing that eases her mind is the prospect of Minnesota authorizing a new kind of savings plan that gets its first committee hearing soon in the state Senate.

These "ABLE" accounts—which stands for “Achieving a Better Life Experience”—allow parents to sock away money for blind or disabled children in the same kind of tax-advantaged 529 account they now can set up to pay for higher education for their college-bound kids. According to a recent article in the Pioneer Press, titled “Minnesota law would help parents of children with disabilities save for future,” right now people with disabilities can lose eligibility for public benefits once they reach $2,000 in savings. With an ABLE account, contributions of up to $14,000 per year are allowed under current rules, and the account could grow to $100,000 before Social Security Supplemental Security Income would be suspended.

The original article points out that these contributions themselves are not tax-deductible. However, your earnings accumulate tax-deferred, and distributions are tax-exempt if they are used for approved purposes like housing, transportation, education, health care, support services, and training. To qualify for an ABLE account, a person must have a significant disability with an onset before age 26.

An ABLE account shouldn’t replace other long-term estate planning, and families need to also look into trusts as well because the ABLE account is capped. When you die, you can't just dump assets into an ABLE account. The ABLE accounts do permit parents to level out how they treat their disabled and nondisabled kids in terms of annual gifts for estate purposes.

In the first bill signed into law this session, Minnesota lawmakers and Governor Mark Dayton included the federal ABLE act. This act was signed by President Obama last year and was added to the state tax code, but lawmakers have to pass a bill to set up ABLE accounts in Minnesota. A Senate bill to do that gets its first hearing this month.